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The Cabinet Committee on Economic Affairs has approved a viability gap funding/partial capital grant of ₹5,176 crore for GAIL (India) Ltd’s 2,539-km long Jagdishpur-Haldia and Bokaro-Dhamra (JHBDPL) natural gas pipeline.
The cost of the entire project is ₹12,940 crore, which means the capital grant is 40 per cent of the total cost of the project.
“The JHBDPL project will connect the eastern part of the country with the National Gas Grid. It will ensure the availability of clean and eco-friendly fuel to the industrial, commercial, domestic and transport sectors in the States of Uttar Pradesh, Bihar, Jharkhand, Odisha and Bengal,” an official statement said.
“This is the first time in the country that the government is spending on oil and gas infrastructure. The Oil Industry Development Board kept collecting a cess for a long time, but never had this money been spent on oil and gas infrastructure,” said Dharmendra Pradhan, Minister of State (Independent Charge) for Petroleum and Natural Gas, after the CCEA meeting.
The CCEA also approved the simultaneous development of city gas distribution networks in Varanasi, Patna, Ranchi, Jamshedpur, Bhubaneswar, Kolkata, Cuttack and others en-route the JHBDPL pipeline project. “These distribution networks will be developed by GAIL in collaboration with the concerned State governments,” the statement said.
Anchor customers for the pipeline project will be the Gorakhpur, Barauni and Sindri fertiliser plants. Natural gas will be supplied to these plants under the Gas Pooling Scheme for urea at a pooled price. (Pooling is the process of deriving an average price for gas produced from all domestic sources as well as an element of imported natural gas.) Meanwhile, Indian Oil Corporation Ltd and GAIL signed a memorandum of understanding with Dhamra LNG Terminal Private Ltd (DLTPL) for taking an equity stake in the 5-million-tonnes per annum LNG terminal being built at a cost of ₹6,000 crore by the Adani Group at Dhamra Port in Odisha.
As per the MoU, IndianOil and GAIL will acquire 39 per cent and 11 per cent equity respectively in DLTPL, with the balance 50 per cent being held by the Adani Group.
However, IndianOil and Adani will each divest 1 per cent of their stake to financial institutions in future. Apart from equity, IndianOil and GAIL will also book re-gassification capacity of 3 million tonnes per annum and 1.5 million tonnes per annum, respectively, in the terminal.
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